Asian shares rebound as investors cheer Trump's pullback on some tariffs

Asian shares were mostly higher Thursday, tracking a rebound on Wall Street after President Donald Trump pulled back on some of his tariffs hikes.

US futures were little changed, while benchmarks surged in Japan and China.

Trump's decision to give a one-month exemption for US automakers on his 25 per cent tariffs for Mexican and Canadian imports raised hopes he may avoid a worst-case trade war that grinds down economies and sends inflation higher.

Tokyo's Nikkei 225 index gained 0.8 per cent to 37,704.93. Japanese automakers' shares surged in US trading, though Toyota Motor Corp's shares fell back in Tokyo trading. losing 1 per cent. Honda Motor Corp. gained 2 per cent and Nissan Motor Co. rose 1.1 per cent.

 

Hong Kong's Hang Seng index jumped 3.3 per cent to 24,362.68 following Chinese government reports to the annual legislative session that showed a greater resolve by Beijing to boost consumer spending and other domestic demand.

The Shanghai Composite index advanced 1.2 per cent to 3,381.10.

South Korea's Kospi jumped 0.7 per cent to 2,576.16, while the S&P/ASX 200 in Australia slipped 0.6 per cent to 8,094.70.

Taiwan's Taiex shed 0.7 per cent, while the SET in Bangkok skidded 0.6 per cent.

On Wednesday, gains for Ford Motor and GM stocks helped lead Wall Street higher.

The S&P 500 rose 1.1 per cent to 5,842.63, while the Dow Jones Industrial Average added 1.3 per cent to 43,006.59. The Nasdaq composite was 1.6 per cent higher, closing up 1.5 per cent at 18,552.73.

Trump said he was granting a one-month exemption for US automakers on his 25 per cent tariffs for Mexican and Canadian imports after talking with Ford, General Motors and Stellantis, which owns Chrysler. That sent relief through Wall Street, and Ford's and General Motors' stock both jumped more than 5 per cent to help lead a widespread rally across the market.

The worry has been that such tariffs would not only hurt profits for companies but also jack up prices for cars and other bills for US households that are already struggling with still-high inflation.

The hope is that Trump is using the threat of tariffs as a negotiating tool and ultimately may institute less painful moves for the economy and global trade if he can win what he wants.

Trump did not roll back all of the tariffs he announced on the United States' largest trading partners, including on China. He said in an address before Congress Tuesday night that he's going ahead with additional tariffs on track to go into effect on April 2.

He has upped uncertainty in markets already reeling after he said Monday that there was no more room for negotiations. The higher tariffs effect Tuesday, causing the US stock market to tumble.

Whatever the outcome, just the threat of tariffs has hit US households and businesses, with consumer confidence souring sharply because of expectations they will fuel inflation. With all the changes coming from Washington, US manufacturers say their growth is approaching stall-speed amid worries about tariffs.

Reports Wednesday gave a mixed read on the US economy. A report from ADP suggested US employers pulled back sharply on their hiring last month, a possible warning signal ahead of a more comprehensive jobs report due out Friday from the US Labor Department.

A separate report said growth for US finance, real estate and other businesses in the services sector is better than economists expected. But businesses also said in the survey they're confronting chaos and uncertainty because of tariffs, according to the Institute for Supply Management.

A recent stream of weaker-than-expected reports on the US economy has raised the possibility of a worst-case scenario known as stagflation. It's something that doesn't happen often, where the economy is stagnating and inflation is high.

The US economy closed out last year running at a solid pace. If it weakens, the Fed can cut its main interest rate to make borrowing easier and goose growth. But rate cuts push inflation higher. It could be boxed in if prices for eggs and other everyday items surge because of tariffs.

In other dealings early Thursday, US benchmark crude oil added 58 cents to $66.89 per barrel, while Brent crude, the international standard, was up 56 cents, to $69.86 per barrel.

The US dollar fell to 148.51 Japanese yen from 148.89 yen. The euro climbed to $1.0803 from $1.0790.